Mangled Thoughts

Joy in the morning. Last week, listening to Rudd and co expanding on their version of the New Deal was that. Right nail biting stuff.

An important observation to be made

Regarding the Colebatch article and his reliance on Kates - as summed up in, Follow up to, “Another insight into the Right”. One held it over, because of its distinct force against Rudd’s destructive keynesian spending spree. There is more involved with the question of real wage rates and employment.

In, America-hating leftists lie to protect Obama’s dangerous economic program, Jackson not only supplied a table for the years 1929 to 1939, with 1929 as the base year, of the unemployment rate for each year and index of productivity adjusted real wages. It shows real wages exceeded the value of worker’s output by a large factor, and this was matched by corresponding, persistent high unemployment. He also demonstrated the consumption fallacy through evidence:

McMillion claims that the 1937-38 crash was caused by a reduction in Federal spending. As we can see from the chart below both Federal and total government spending increased until 1936 when Federal spending dropped from 10.94 per cent of GDP to 9.58 per cent of GDP while total spending (Federal and state) fell from 20.17 per cent of GDP in 1935 to 18.74 per cent of GDP in 1937. These are falls of 12.7 per cent and 7.1 per cent respectively. [Table supplied].

The fall in total government spending amounted to a paltry 1.43 per cent of GDP…

This nonsense became so entrenched that in 1943 Paul Samuelson confidently predicted that when the war ended and government spending was significantly cut mass unemployment would return on the scale of the 1930s….

Between 1945 and 1947 the Truman government slashed Federal annual spending…

a staggering 62 per cent reduction and amounted to 26 per cent of GDP as it stood in 1945. Instead of America spiralling into a depression with 8 million unemployed — as predicted — it began the longest period of prosperity in its history. What McMillion and the rest of the leftists ignore is the fact that it was a massive union push for higher real wages that caused the 1937-38 crash.

The killer is, Jackson set out, America was in recovery before Rossevelt imposed his disastrous “New deal”. On the current recession, he restates it another way:

If Megalogenis were right then the closing of “wallets across the world” would have preceded the contraction in manufacturing. Yet manufacturing in the US has been contracting for 13 months and for at least 9 months in Australia. According to Greg Evans’ logic Rudd’s $10.4 billion spending splurge should have seen manufacturing rebound. Instead it continued to contract. The table below shows what an awful state manufacturing is in.

The economy tanks as politicians look the wrong way

In summary, consumption is never the problem. That it rises in recessions is stark testament to the fact. It is savings that is crucial, which Rudd and Premiers are busy extinguishing.

Needless to say, imposing effective minimum wage rates (rates greater than the marginal value of labour’s product), using as the excuse that they will raise consumption and so deliver growth, is completely false. The only growth that delivers is in the one called unemployment.  

Through the combination of keynesian snake-oil and carbon taxes, what Rudd and Swann are about to do to Australians, should they persist, is too chilling to contemplate. Scarier is, what sits on the Opposition benches are no better. It is amusing that the stiffest Opposition Rudd has faced is from Vaclav Haval, who had no hesitation in declaring Rudd’s domestic economic policies and his grand “internationalisto” version means only one thing, destruction. Unable to defend his economic larceny, all Rudd could do was use the Right’s standard argument against Haval (jerk knee and come out smearing)!

Rudd and Swann are illiterates. However, in view of their positions, ignorance is no excue and so it is best to call them liars. The same applies to Peter Costello and Turnbull.

Entertain no doubt about it: it doesn’t matter what anyone does, most will be ruined if the lying illiterate parasites in Canberra, and in States’ Parliaments, continue on their merry, Statist, all consuming, all regulating ways. It’s a bit like being caught in the middle of a two mile tunnel with a bloody great truck entering it atnasty pace. Nowhere to run. Well, the duty of serfs is to be taxed for all they have and then go and die in some obscure, dark hole, silently.